Filenews 3 February 2023 - by Eleftheria Paizanou
The electronic filing and payment of taxes has led to an increase in taxpayers' tax compliance. According to data from the Ministry of Finance, 95% of natural persons who have an obligation to file a tax return comply on an annual basis. Since 2018 (for tax year 2017) it is mandatory to electronically submit the income statements of an employee and self-employed.
It is reminded that tax returns are submitted through the TAXISnet system and year after year they are further simplified. In particular, automations have been introduced in filling out returns and calculating taxes, which greatly facilitates taxpayers to save time and comply with their tax obligations in a timely manner.
At the end of 2024, tax returns will start to be submitted through the new Tax For All (TFA) system, which is a Unified Management System, of the Tax Department. The implementation of the new system will take place in three phases and will gradually replace TAXISnet.
For the tax year 2021, according to data from the Tax Department, in total 280,000 submitted electronically their tax returns. It is reminded that for the tax year 2022, the submission of taxpayers will begin in April 2023 and for another year those who have mixed incomes that do not exceed €19,500 will not be obliged to submit an income declaration. [NB If your income is less than €19,500 but you have lived in Cyprus for 17+ years you should, however, submit a return of interest earned so that the defence levy is paid]
The other measures
Meanwhile, three other factors have contributed to strengthening citizens' tax compliance. In particular, the electronic payment of taxes was strengthened. The measure is successfully implemented and about 90% of payments to the Tax Department are made electronically. This reduced the delays and endless queues at the department's box office, while improving taxpayer service.
In addition, the legislation on the mandatory acceptance of credit cards as a means of payment came into force. As of September 2021, consumers have the right to pay both by card and cash at retail premises, service businesses, restaurants and recreation areas, as well as several other service areas. Businesses that refuse to receive credit cards from consumers, according to the law, are fined €4,000. At the same time, the transparency of legal entities and arrangements for further protection against terrorist financing risks were strengthened.
Further facilities
In the future, it will be easier for taxpayers through the operation of the Integrated Tax For All System.
Finally, the campaign to clean up late work will help to carry out the procedures better. The aim is to clear tax returns within 3-6 months of the deadline for their submission and to carry out a more targeted audit of taxpayers. By the end of July 2023, it is estimated that a total of 850,000 for taxes 2019-2021 will be cleared.
